Panasonic recently decided to withdraw its photovoltaic panel and battery production lines back to Japan, and the news about the relocation of its high-end air conditioner compressor factory back to Japan has once again sparked heated discussions within the industry.
For air conditioners, compressors are the components that best represent core technology, similar to the chips in smartphones or the engines in cars.
The news of Panasonic's compressor withdrawal from Guangzhou was first exposed as early as June 2023.
According to reports, about 90% of Panasonic air conditioners sold in Japan were produced in the Guangzhou factory.
However, starting from 2023, Panasonic decided to produce all high-end air conditioners in Japan domestically.
And starting from this year, Panasonic's mid-range air conditioners will also be produced in locations such as the Kusatsu factory in Shiga Prefecture, Japan.
This means that Panasonic's retreat from the Chinese market can only result in shrinking production lines and relocating production capacity back to Japan.
So, why did Panasonic decide to relocate compressor production lines and air conditioner capacity back to Japan?
Firstly, Panasonic's market share in the Chinese market is only 1.5%, which is already insufficient to support its layout in the Chinese market.
Since entering the Chinese market in 1979, Panasonic has been widely praised for its technological innovation, advanced compressor technology, and consumer-oriented product concepts, occupying a leading position in the air conditioning industry.
However, with the rapid development of the Chinese air conditioning industry, a large number of domestic air conditioning companies have entered the market, and price wars have swept the entire industry.
Panasonic's product pricing is much higher than that of domestic air conditioners, and its cost control disadvantage is evident.
Furthermore, Panasonic once mistakenly focused on the market for industrial central air conditioners, later realizing the route error, but it was too late to adjust.
Therefore, as sales and profits continue to shrink, Panasonic can only continuously streamline production lines and relocate core production capacity back to Japan.
In the past two years, Panasonic has successively closed factories in Shanghai and Shenzhen, and its market share has directly dropped from its peak of 40% to the current 1.5%.
Behind this is the fierce competition in the Chinese home appliance market, where cost and price wars have made it difficult for Panasonic to continue.
Panasonic's retreat indicates that the withdrawal of high-end compressor production lines does indeed have an impact on the Chinese market under the current market environment.
In the domestic air conditioning market, many brands do not independently develop compressors but rely on imports, especially for high-end compressors.
The withdrawal of Panasonic's high-end compressors may not have much impact on the production lines for mid-to-low-end compressors, but for high-end compressors, the market gap may lead to some consequences.
Currently, most Chinese domestic air conditioning companies rely on imported high-end compressors, which also means that Chinese domestic air conditioners still lack competitiveness in the high-end market.
While ensuring product quality and performance, Chinese domestic air conditioning companies need to increase investment in technological research and development, enhance independent innovation capabilities, and reduce their reliance on imported compressors.
Finally, the development of the air conditioning industry reflects a microcosm of the manufacturing industry. Only by continuously improving technological levels and pursuing high-quality, high-efficiency products can one remain invincible in the global market competition.
Panasonic's retreat also serves as a wake-up call that one cannot blindly indulge in price wars and cost wars but should consider how to enhance technological content and product added value from the perspective of long-term development.
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